Donald Trump, the President of the United States, just tweeted against Nippon Steel’s takeover of U.S. Steel. His comment brought attention to the significance of this big step forward. The president bragged, perhaps disingenuously, that the deal had taken almost 18 months to negotiate. He promised it would make sure that U.S. Steel never leaves America again. His backing for the deal is the last key support needed to get them approved and allow it to proceed.
In his statement, Trump noted that the deal hollowed out American jobs and America’s manufacturing base. He assured that U.S. Steel will continue its manufacturing presence in the United States. This announcement was meant, in part, to quell anxiety over potential layoffs and offshoring as a result of the merger.
The agreement is a significant movement toward consolidation within the steel industry, indicative of worldwide changes in market conditions. Nippon Steel, one of Japan’s major steel producers, is looking to increase efficiencies in their operations. With this acquisition, they intend to grow their footprint in North America. The joint development agreement is designed to strengthen both partners’ technology, capabilities, and competitiveness in the rapidly changing, market-driven environment.
The public announcement of the merger was just over 18 months ago, after years of secretive negotiations between the two companies. The two year long deliberation period speaks volumes to the complicated nature of cross-border mergers and acquisitions. This is glaringly evident in sensitive industries such as steel production.
Trump’s surprising endorsement of the deal has reinvigorated discussions, inciting curiosity among industry experts and stakeholders on both sides of the aisle. Yet, for others, it’s perceived as a convenient tactic. It aligns with the administration’s stated priorities of strengthening domestic manufacturing and safeguarding American jobs. Still, many critics are adamant that the long-term effects of these foreign investments need further scrutiny and review.